Key Findings: BCG Payments Report

Here’s some required reading for anyone interested in the payments industry: Boston Consulting Group’s 2011 global payments report entitled “Winning After the Storm.” BCG issues a comprehensive report on the worldwide payment landscape every year or two, and this edition shows the effects of the 2008 global downturn on today’s payments business—and what institutions can do to adapt and prosper in the years ahead.

We recommend that you read the entire report, but here are a few key findings to whet your appetite:*

  • The global payments market will be worth $782 trillion in noncash transaction value and $492 billion in transaction revenues by 2020
  • Global transaction volumes have slumped since 2008 and checking account balances have slipped in certain customer segments. The relatively cyclical credit card business has taken an extraordinary hit—especially in the U.S., where high losses have been linked to rising unemployment
  • Global payments revenues fell at a compound annual rate of 7 percent from 2008 through 2010, but overall volumes and values are back to pre-crisis levels in most countries
  • In Europe, annual retail-payments values and volumes remained relatively flat from 2008 through 2010 at roughly $10 trillion and 70 billion transactions, respectively
  • In the United States, the payments industry has gone through considerable disruption. From year-end 2008 through 2010, total payments revenues fell at a compound annual rate of 4 percent despite steady payments values and a 3 percent rise in volumes driven by steady growth in ACH and debit card transactions; total revenues are expected to grow but will remain about 6 percent below the 2007 peak of $162 billion—a level not likely to be surpassed for another few years

The BCG report also had interesting things to say about the increasing role of the online channel in payments:

“As banks and other payments institutions react to the challenges caused by the new regulatory environment, they must also look ahead to the next wave of digital innovation. The online channel is already the preferred U.S. banking channel (based on the number of transactions), and people are using a growing number of features. Moreover, mobile banking should come increasingly to the fore, playing a vital role in building transaction volumes, lowering cost-to-serve, and opening new opportunities to win market share.

“Mobile banking is not merely about transferring online banking to a small, smartphone screen. It is about linking banking services with everything that mobile-phone applications and location-based technology have to offer. Possibilities for customers include receiving real-time text alerts about bills that are due, being able to snap a picture of a check for remote deposit, and receiving directions to find a bank branch or merchant that offers rewards on their cards. If banks can provide both customers and merchants with the right incentives and functionality, mobile payments will flow strongly into the payments mainstream in the U.S. over the next decade.”**

To download a free copy of the BCG report (registration required), please visit


*Source: BCG Report, Global Payments 2011, “Winning After the Storm,” pages 4-6.

**Ibid, pages 19-20.

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